May 14: Loss aversion & rate locks; economic trends; vendor news; Saturday Spotlight: Staircase

Did you know that Saudi Aramco (ARMCO) has officially topped Apple (NASDAQ:AAPL) as the world’s most valuable company? At one point this week the state-owned energy giant closed with a market capitalization of $2.43 trillion, more than Apple. Things are a’changin’ out there. In our industry there are large numbers of people being laid off or “right-sized.” (Those who are can post their resumes for free on, and employers can view them for several months for a $75 charge.) Volume, margin, are revenue are down for every lender, and those with servicing are peeling off pieces to sell the mortgage servicing rights to raise cash while at the same time using cash from the last two years, assuming owners kept the money in the company. After all, warehouse banks, broker dealers, and correspondent investors like to see money in the bank and quarterly earnings. We all knew that this was coming, in some manner. And lenders are doing what they can to “fight another day.”

Saturday Spotlight: Staircase


Providing an open software marketplace for all businesses in the residential mortgage vertical.

What does your company do to help elevate your employees’ growth? Describe any mentoring programs, outside classes or training, in-house training. How does the company help people develop? 


We have a program called Staircase Academy that hires and trains individuals who we believe are high potential and culturally aligned but have experience or skill gaps relative to our job description. We spend three months using paid, on-the-job training to fill these gaps and then convert these individuals to full-time employees.


This program was started by our team in New Cairo, Egypt and has been effective and rewarding growing our international team, in particular for underrepresented groups.


Tell us how your company maintains its culture in a work-from-home environment, or how you plan on bringing employees back into the office, if applicable.   


Staircase was founded in Q1 2020, so we have been remote-only for our entire history. We currently have teammates in 15 countries with centers of gravity in Croatia, Ukraine, Turkey, Egypt, and Brazil.


Our primary source of recruiting is internal referrals, so often the teams centered in these areas have a working history together that helps build team bonds. We also try to bring the teams together 2-4 times per year divided into Western and Eastern hemisphere teams. We’re hoping to do an all-company meeting sometime in 2023.

In 3-5 sentences, describe your company (when was it founded and why, what it does, where, recent growth and plans for near-term future growth).


We were founded in 2020 and our mission is to bring together buyers and sellers of technology in order to create a better, faster, and less expensive borrower experience.


Staircase is an open software marketplace for all businesses in the residential mortgage vertical. We enable the frictionless integration of any 3rd party software into any system of record (POS, LOS, Servicing, or homegrown). Through Staircase, you can access the sum of the capabilities of the entire market of software providers. Our marketplace currently has 40 technology partners with over 100 individual products connecting into 10 LOS/POS systems. Our goal over the next 12 months is to have every technology provider and every system of record.


Currently, we are focused on supporting originators curate leads using our Verification Waterfalls and on supporting servicers with loan boarding and MSR transfers.

(For more information on having your firm’s extracurricular activities, employee growth, and your charitable side featured, contact Chrisman LLC’s Anjelica Nixt.)

Loss aversion & rate locks


Yesterday’s commentary discussed “loss aversion.” People feel the pain of losses much more than they feel the pleasure of gains. Empirical studies suggest that losing is twice as painful as winning is enjoyable. So people will go to great lengths to avoid losses, and to recover what they’ve lost. Loss aversion makes people cautious: offered the choice between five hundred dollars and a fifty percent chance at a thousand dollars or nothing, most people take the sure thing. But once people have sustained loses, impulses change dramatically. Offered the choice between losing five hundred dollars and a fifty percent chance of losing a thousand dollars or nothing, most people prefer to gamble. This is why people hold falling stocks, hoping for a rebound rather than cutting their losses, and its why they double down after losing a bet.

From Southern California thanks to Scott L. who wrote, “I came to understand loss aversion when I was an originator back in the 90s. What I realized is that clients who opted to float at app were much unhappier if rates went up than happy if rates dropped… And for that reason I always encouraged clients to lock at app if possible.

“I didn’t know what to call it though until I read ‘Thinking Fast and Slow,’ Daniel Kahneman’s book based on his (and his partner’s) Nobel prize winning theories, essentially establishing behavioral economics. It’s a highly recommended read if you haven’t already (alternatively, Michael Lewis’ “The Undoing Project” is really good as well, covering the relationship between Kahneman and his partner Amos Twersky but describes their work along the way).”

Vendor bites


The nationwide database for U.S. homebuyer assistance programs, Down Payment Resource (DPR), announced that® has deployed DPR’s search tool that helps home shoppers find homebuyer assistance programs. DPR maintains a comprehensive catalog of all of the homebuyer assistance programs available in the United States, including down payment and closing cost programs, Mortgage Credit Certificates and affordable first mortgages® has deployed DPR’s search tool on to support its Closing the Gap initiative, which is aimed at increasing the homeownership rate of underserved and underrepresented communities. The search tool can be embedded in an organization’s website and enables home shoppers to search for homebuyer assistance programs by entering property, household, and relevant eligibility information.

First American Financial Corporation  has completed its acquisition of Mother Lode Holding Company, a California-based provider of title insurance, underwriting and escrow services for residential and commercial real estate transactions with 17 operating subsidiaries throughout the U.S., including its principal subsidiary Placer Title Company. Its subsidiaries are premier brands within their respective real estate communities. With 92 offices in 11 states, the company is rooted in a 49-year track record of providing superior customer service. well as access to other industry-leading resources for residential transactions. Mother Lode Holding Company Chief Executive Officer Randy Bradley, Chief Operating Officer Lisa Steele, and President Darrick Blatnick will continue to lead the company, which will now operate as a wholly owned subsidiary of First American. The company and its operating subsidiaries will continue to operate under their existing brands.

Leading Real Estate Companies of the World® selected homegenius(TM), a full-service ecosystem of real estate services leveraging advanced technology and the latest developments in data science for its Solutions Group program, a collection of preferred business resources for the global network of 550 real estate firms. Offering a variety of services and solutions, such as geniusprice(SM), a property intelligence platform designed to replace traditional Comparative Market Analytics (CMA) that allows users to evaluate and modify suggested comparables instantly, see inside a home using AI-driven computer vision technology, and track market performance trends with a unique Home Price Index.

The ICE Mortgage Technology homepage now has interactive tools that present comprehensive, real-time mortgage data pulled directly from Insights™ by ICE Mortgage Technology™. These interactive tools provide data on 30-year note rates, closed loan rates, days to close, and more to help customers identify trends as they happen, so they can create a competitive advantage.

Economic snapshot


The economy unexpectedly contracted in the first quarter of 2022, but its underlying momentum remained solid, dispelling fears that it has slipped into recession. The first estimate of real GDP showed a 1.4% annualized contraction in the quarter, after a 6.9% annualized jump in the fourth quarter of 2022. The first quarter saw big drags from an increase in the trade deficit, businesses adding more slowly to inventories, and lower government spending.

The components of final demand that say the most about the economy’s underlying trend, consumer spending and business fixed investment, both grew solidly in the first quarter. Real GDP will return to growth in the second quarter as trade, inventories, and government spending become less of a drag. But growth is moderating as the economy transitions from a breakneck-fast recovery in the second half of 2020 and 2021 to a slower expansion in 2022.

The April jobs report is further reason to see the first quarter’s decline in real GDP as a fluke and not a warning signal of recession. U.S. employers added a net 428,000 jobs to payrolls during the month, and the unemployment rate held unchanged at 3.6%, a hair’s breadth from the 3.5% low of late 2019 and early 2020, which was the lowest in a half century. The April jobs report also showed wage growth is cooling. The three-month moving average of wage growth slowed to under 4% annualized in April, down from over 6% in late 2021. Business surveys have consistently pointed to wage pressures as a reason behind inflation’s surge to a 40-year high in early 2022. There are still upside risks to inflation from surging energy and food prices, knock-on effects of the Russia-Ukraine war, and from China’s lockdowns, which could cause renewed shortages of imported goods. But slower wage growth, as well as a decline in used car prices (wholesale auction prices have been edging lower since January) makes it likely that inflation peaked in year-over-year terms in the spring of 2022.

We all know that the Federal Open Market Committee (FOMC) made a half-percentage-point hike to the Federal Reserve’s policy rate at their May rate decision, to a range of 0.75%-to-1.00%. Fed Chair Powell says the Fed is moving “expeditiously” to get monetary policy back to a neutral setting, meaning that it will neither add to nor hold back economic growth. Most members of the FOMC think neutral is probably between two and three percent. Fed Chair Powell said after the May decision that “There is a broad sense on the [FOMC] that additional 50 basis point increases should be on the table at the next couple of meetings.”

What’s ahead. Many are betting that the Fed makes two more half-percentage point hikes in the federal funds rate at the next two decisions, in June and July, and then raise the rate a quarter percentage point at the three remaining decisions in the rest of the year. This will raise the federal funds rate to a range of 2.50%-to-2.75% by year-end. The Fed also announced the beginning of reductions in the size of their balance sheet at their May decision, which will actually get underway in June; this policy change is pushing long-term interest rates higher.

I was recently asked the question, “If the Fed has stopped buying MBS and Treasuries, and will start selling, then what is the Federal Reserve buying every day?” The answer is that the Federal Reserve buys various assets dictated by the availability of eligible assets as well as practical policy considerations. Traditionally, the Fed’s assets have consisted mainly of U.S. Treasury securities: bills, notes, and bonds, Mortgage-backed securities (MBS) have been the second largest asset by value on the Fed’s balance sheet, entitling the Fed to cash flows from a fixed-income basket of mortgage loans. The Fed can also manipulate currency in circulation, bank reserves on deposit, and reverse repurchase agreements (borrowings of Treasuries from commercial counterparties).

Remember that the Federal Reserve can “print money” to buy securities outright, or can use the cash from early payoffs (when a loan pays off through the sale of a property, or refinances), or the cash it has coming in from monthly principal and interest payments, to buy securities. So the Federal Open Market Committee can gradually ease its buying, which is why we still see Fed purchases.

The Fannie Mae Home Purchase Sentiment Index, a composite index designed to track consumers’ housing-related attitudes, intentions, and perceptions, decreased in March as consumers continue to express pessimism regarding the trajectory of mortgage rates and home buying conditions. Overall, four of the index’s six components decreased month over month, including the components asking consumers whether they expect mortgage rates to go up and whether they believe it’s a good time to buy a home. High home prices, rising mortgage rates, and macroeconomic uncertainty are consumers’ chief concerns.

Mark Palim, Fannie Mae VP and Deputy Chief Economist, said “Only 24 percent of consumers believe it’s a good time to buy a home, and a survey-high share of consumers expect their financial situations to worsen over the next year; this was especially true among current homeowners. These concerns, together with the run-up in mortgage rates since the end of 2021, will likely diminish mortgage demand from move-up buyers – and fewer move-up buyers mean fewer available entry-level homes, adding to the rising-rate challenges for potential first-time homebuyers. If consumer pessimism toward home buying conditions continues and the recent mortgage rate increases are sustained, then we expect to see an even greater cooling of the housing market than previously forecast.”

we issued the release below “While Still Strong, U.S. Home Price Appreciation Rate Slows, Radian Home Price Index Reveals” … just wanted to share with you and see if it would be possible to get a mention in your commentary.

In February, home prices across the United States rose at a slower pace than the month prior (January 2022) but continued to appreciate at higher rates than the year earlier (February 2021). According to Radian Home Price Index (HPI) data released last month by Red Bell Real Estate, LLC, a Radian Group Inc. company (NYSE: RDN), home prices nationally rose from the end of January 2022 to the end of February 2022 at an annualized rate of +11.3 percent. The company believes the Radian HPI is the most comprehensive and timely measure of U.S. housing market prices and conditions.

February 2021 marked the last month that national home prices appreciated by less than 10 percent. Since then, the U.S. housing market has witnessed a prolific string of twelve consecutive months of annualized monthly home price appreciation of more than 10 percent. As a result, the median home price of all homes in the U.S. has risen by more than $41,000 in just twelve months. However, after peaking in September 2021, home price appreciation rates have slowed in each of the subsequent five months.

THE DEBT CEILING (currently $28.4 trillion)

Democrats don’t understand THE DEBT CEILING

Republicans don’t understand THE DEBT CEILING

Liberals don’t understand THE DEBT CEILING

Conservatives don’t understand THE DEBT CEILING


Ss, allow me to explain.

Let’s say you come home from work and find there has been a sewer backup in your neighborhood. Your home has sewage all the way up to your ceilings. What do you think you should do? Raise the ceilings or pump out the “stuff”? Your choice is coming in November. Don’t miss the opportunity.

Visit for more information on our industry partners, access archived commentaries, or to subscribe to the Daily Mortgage News and Commentary. If you’re interested, visit my periodic blog at the STRATMOR Group web site. The current blog is titled, “A Primer on the Federal Reserve and Mortgage Rates.” The Commentary’s podcast is live and at any place you obtain your podcasts (like Apple or Spotify).


(Market data provided in partnership with MBS Live. For free job postings and to view candidate resumes visit LenderNews. This newsletter is for sophisticated mortgage professionals only. There are no paid endorsements by me. For up-to-date mortgage news visit Mortgage News Daily. For archived commentaries, or to subscribe, go to Copyright 2022 Chrisman LLC. All rights reserved. Occasional paid job & product listings do appear. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Rob Chrisman.)

Rob Chrisman